Many Democrats unhappy with CPI offer

After weeks of gleefully watching Republicans struggle to find their footing in fiscal cliff talks, it’s time for the Democrats to do some painful soul-searching of their own.

President Barack Obama’s latest offer to congressional Republicans crosses lines that Democrats have long portrayed as untouchable. The provision causing the most heartburn for Democrats on Capitol Hill is one that would change the way inflation is measured to ultimately reduce payments to Social Security beneficiaries.

Fiscal cliff: A primer

Obama floated the so-called chained consumer price index idea to House Speaker John Boehner (R-Ohio) last year during their failed negotiations over raising the debt ceiling. But by including it in his fiscal cliff offer, Obama is guaranteeing that if and when a deal comes together, it’s almost certain to include the provision.

It would force Democrats — who have spent decades building their brand as the protectors of Social Security and entitlement programs — into a difficult vote. And their support for a fiscal cliff package will be crucial to offset Republicans who might oppose any deal that raises tax rates, an area where Boehner has moved closer to Obama in recent days.

The White House dispatched Legislative Affairs Director Rob Nabors to Capitol Hill on Tuesday to explain the proposal to House and Senate Democrats and try to assuage their concerns.

Still, multiple lawmakers expressed deep concern about the direction of negotiations with less than two weeks left before Washington plunges off the fiscal cliff.

“This should be off the table,” a visibly frustrated Rep. Jan Schakowsky (D-Ill.) told reporters. “I hope that offer … will be reconsidered.”

Sen. Sherrod Brown (D-Ohio) was more blunt, calling the chained CPI proposal “terrible.” He said the existing inflation calculation was already insufficient.

“I don’t think the CPI now captures health care costs of retirees,” Brown said. “It’s more connected to people in their work lives with a different set of needs.”

New York Rep. Charles Rangel, a senior Democrat on the tax-writing Ways and Means Committee, called the chained CPI measure a “very, very bad idea.”

“It doesn’t save us much money, and it’s going to cause financial heartbreak,” he told POLITICO.

The White House estimates that the new inflation calculation would save $130 billion over 10 years. Most of those savings would probably occur in later years.

AARP, the nation’s largest lobbying organization on behalf of seniors, also urged Congress and the White House to nix the CPI change.

“This dramatic benefit cut would push thousands more into poverty and result in increased economic hardship for those trying desperately to keep up with rising prices,” Nancy LeaMond, executive vice president of AARP’s State and National Group, said in a statement.

Several Democrats said they’d keep resisting such changes.

“I think most of us in there are arguing very strongly against cuts to social safety net programs,” Connecticut Rep. Chris Murphy, who will join the Senate next year, said of fellow House Democrats. “I for one understand there’s likely going to be a tough vote for a lot of us on programs we really care about.”

And Massachusetts Rep. Jim McGovern said the provision does little more than “balance the budget on the backs of poor people.”

“Reducing the amount that somebody might get in terms of a cost-of-living adjustment for Social Security — people who are living on small checks — doesn’t seem like a very fair way to do it,” he said.

It’s doubtful the indignation will have much effect in the fast-moving negotiations, however.

White House spokesman Jay Carney defended including chained CPI in the president’s proposal and described it as an effort to find common ground with Republicans. And the White House has cast its version of the provision as “superlative CPI,” arguing that it protects particularly vulnerable groups that would be hit by Republicans’ preferred chained CPI plan.

Readers' Comments (20)

Simple solution. There is 1.5 trillion in obamacare subsidies. Social Security is a very popular program and obamacare is not. Get the money from obamacare subsidies and leave SS alone. The Republicans can even win on this one.

Democrats will lose some of my budgeted $50/month in donations if my benefits are decreased. My electric bill has gone up by 18% since last December. My benefit rose by 1.5%. Something is wrong with this picture.

Dems Seek to Bury Americans -- Republicans say no to Obama’s opening ‘cliff’ bid of Mass Taxation OBAMA White House bid calls for tax hikes, permanent debt ceiling increase By Robert Schroeder, MarketWatch :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: WASHINGTON (MarketWatch) — The Obama administration and House Republicans were at loggerheads Thursday in fiscal cliff talks, as the White House reportedly called for $1.6 trillion in new tax revenue and an unlimited debt ceiling on the table, as House Speaker John Boehner said there has been “no substantive progress” in negotiations.::::::::::::::::::::::::::::::::::: Late Thursday, The Wall Street Journal, citing House Republican aides, said the White House’s opening bid in the talks included $1.6 trillion in tax revenue as well as a “permanent” increase in the U.S. debt ceiling. The administration also wants at least $50 billion in new spending to spur the economy, the aides told the Journal. ::::::::::: Boehner called on Democrats to “get serious” about spending cuts if they want a deal to avoid the automatic spending cuts and tax increases set to begin Jan. 1.:::::: For their part, Democrats on Thursday kept up the sniping over getting to a cliff deal. Senate Democratic Leader Harry Reid insisted on raising top income-tax rates and said that raising the U.S. debt ceiling must be part of an agreement. Boehner said there would be a “price tag” for raising the debt limit " :::::::::::::::::::::::::::::::::::::::::: Federal Reserve officials are near a decision to continue stimulus efforts into 2013 as the U.S. faces the fiscal cliff and economies around the world remain fragile. (Photo: AP) Boehner pointedly said he is not walking away from discussions about the fiscal cliff. He told reporters that his meeting with Geithner was “frank and direct.”::::::::::: Geithner offered some spending cuts in programs such as farm-price supports, but didn’t specify a number, the New York Times reported.::::::::::::: President Obama also wants to tax dividends as income and is seeking a 45% estate tax on inheritances over $3.5 million, the Times reported. Underneath the public rhetoric, meanwhile, the shape of a deal appears to be emerging. Politico reported Thursday that taxes will go up by just below $1.2 trillion; entitlement programs will be slashed by at least $400 billion; and there will be at least $1.2 trillion in spending cuts — the same amount as the automatic cuts set to begin on Jan. 1 if Congress doesn’t act. Read more on Political Watch blog. “All you have to do is just listen to what’s happening out there, and you realize there is progress,” said Sen. Chuck Schumer, a New York Democrat. Geithner met with the Republican and Democratic leaders of the House and Senate to present the administration’s case for avoiding the fiscal cliff. On the Senate floor earlier Thursday, Reid stuck firm to Democrats’ insistence on extending middle-class tax cuts, only to be rebuffed by his Republican counterpart, Mitch McConnell. McConnell suggested capping tax deductions to raise revenue, instead of raising income-tax rates. The debt ceiling is likely to be reached in the early part of 2013 without an agreement to raise it. Carney said it should be should be raised without any drama in Washington. “Asking that a political price be paid for Congress to do its job to ensure that the United States of America pays its bills and does not default for the first time in history is deeply irresponsible,” he added.

Guess which Hawaii-born President is to blame for that. And it's going to go up a lot more under the rest of Obama's EPA regulations and planned legislation. In the following interview, here is what Obama has to say about it:

Why is Social Security even being dragged into these negotiations in the first place? Many seniors have enough of a struggle subsisting on their SS checks. Why would the Pres want to offer a provision that not only does not keep Social Security checks current with inflation but, overtime, erodes its value.

In 2010 and 2011, large cuts were already made in so-called "entitlements". In the meantime, the top 2% have not had to give up or sacrifice anything! Is this fair? I am very disappointed in this offer.

Massachusetts Rep. Jim McGovern says the CPI provision does little more than "balance the budget on the backs of poor people." He's right, but doesn't he see? President Obama must try to balance the budget on the backs of our oldest and poorest citizens if he and everyone else making $400,000 a year are to get a big tax cut.

Obama thinks he's being "reasonable" by compromising with the Republican demands, but that isn't the definition of reasonable. Meeting unreasonable, inhumane demands halfway is merely becoming unreasonable and inhumane yourself.

No one has mentioned first paying back the Social Security trust fund the $4 trillion our government has borrowed from it to spend on other things. That must be done first before you start talking cuts to our neediest seniors. It doesn't look promising since Obama hasn't even been sworn into office for his second term yet and he's already breaking the central campaign promise of his 2012 campaign; he promised to return the tax rates on the richest to the Clinton 39.6% level. That will happen automatically as surely as January follows December if Obama only keeps his greedy hands off the automatic expiration. That's money in the bank and from people who won't even miss it, but Obama is offering to break his central campaign promise (a reasonable one, by the way) and willing to turn his back on all those millions who voted for him to get those Clinton rates on the richest.

Obama is offering to betray reason and compassion and justice, as well as everyone who voted for him. I hope he backs off and rethinks things rationally. You cut all government spending on the richest first -- ALL government spending -- then you look to the next richest to tax and close loopholes on; those who won't suffer greatly from the changes. You don't protect and coddle millionaires and shift the cuts to our seniors trying to live on Social Security checks and call it "reasonable."

Obama will run off on his 5 million dollar Hawaii tax payer paid vacation to stay in his 50 thousand week beach home as he says no to benefits to seniors that will have hard time paying for Christmas dinner

Republicans have no integrity when it comes to opposing tax increases on Americans, so why even pretend? They are seeking a 2% payroll tax hike in January and it looks like Obama is too. Republicans aren’t even asking for, much less fighting for, taking off the table the payroll tax hike that will hit all working Americans in January. Republicans are frauds. They have no principled position on taxes. Their only guiding principle is do everything they can to further enrich the richest at the expense of the rest of US.

"They are seeking a 2% payroll tax hike in January and it looks like Obama is too. Republicans aren’t even asking for, much less fighting for, taking off the table the payroll tax hike that will hit all working Americans in January."

It doesn't have anything to do with "seeking." Just like the Bush tax cuts will expire, by law so will the temporary "payroll tax holiday". In January, the payroll tax will revert to its normal level, so that Social Security can be funded. The employee portion has been temporarily at 4.2% the last 2 years and is scheduled to revert to 6.2% in January. Perhaps they will move the max income level up on which payroll taxes are applied.

So the Obama administration is using the CPI to toss senior citizens on Social Security over the fiscal cliff. Is this a surprise to anyone?

Inflation for 2012 is estimate to be 8%. The CPI is less than 2% for this year. Any senior citizen who relies on Social Security just lost 6% of their spending power this year. And they will lose more next year and still more the year after that.

But that's what they voted for when they put this lying socialist back in power for another four years. Your chickens are coming home to roost. You're getting what you said you wanted - a four-year extension of the recession.

There are plenty of examples around to prove that the principles of Karl Marx as espoused in The Communist Manifesto have never worked anywhere they've been tried, and it's obvious that they're not working here either. The four year recession that the White House bumbler has put us through should have been a clue. Maybe another four years of the recession will wake some of these clueless, uninformed voters up.

Obama will run off on his 5 million dollar Hawaii tax payer paid vacation to stay in his 50 thousand week beach home as he says no to benefits to seniors that will have hard time paying for Christmas dinner

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You are an idiot. I don't think I need to quantify that statement.

FoxFan

Member Since: Jun. 26, 2009

Party: Tea Party

#15

Dec. 19, 2012 - 7:41 AM EST

So the Obama administration is using the CPI to toss senior citizens on Social Security over the fiscal cliff. Is this a surprise to anyone?

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The GOP tabled the CPI offer first, Obama is just not opposing it. Way to get yourself in a tissy over the fake news you got from Faux.

The Dems are going to have to take their medicine, too. We knew that social programs were on the table, and this is a result of that. If it gets a deal done that gets all this overwith, so be it.

But here's what I don't get from the Grand Old Party...How is the CPI worth the fight? From what I'm told by every pluotcrat that votes Republican these days, allowing the tax cuts to expire for the top 2% of earners will "only" generate $80 billion in revenue. So I ghave been told time and again it's not worth it because it barely puts a dent in the deficit....yet somehow thios $100 billion is a deal breaker?

Please pluotcrats....explain to me how that makes sense, I'm all ears.

Democrats will lose some of my budgeted $50/month in donations if my benefits are decreased.

------------------------------------------------------------------------------------------------------------------------------------ Genius! You can afford to donate money to a political party. FOR WHAT! But you can't take a hit to your social security in order to save the program for those who truly need it.

Genius! You can afford to donate money to a political party. FOR WHAT! But you can't take a hit to your social security in order to save the program for those who truly need it.

I think that the Koch Bros. have demonstrated to the entire nation that the extremely wealthy can do a lot more towards paying their fair share of taxes. If they cared about job creation, they would not have squandered millions producing negative ads. Let's start with the asking the Koch Bros. and their ilk to pay their fair share before we get get to Yorksoo...